The WGA and the Association of Talent Agents have concluded their fifth day of bargaining for a new franchise agreement, with the ATA saying there’s a “dark cloud of uncertainty” hanging over Hollywood as the two sides again made little progress toward resolving the two key issues: the guild’s demands that the agencies stop collecting packaging fees and sever their ties with affiliated production entities. If no deal is reached by April 6, when their current agreement expires, the guild could ask its members to fire all of their agents who don’t sign its proposed new Code of Conduct.
No date has been set for the next round of talks, and today’s session made no progress at all toward a deal. The ATA passed along questions that their clients have been asking (read them here), but the guild didn’t even want to hear them. The ATA provided answers to some of the guild’s questions from last week, and then WGA leaders said they were going to take a break – and then never returned.
“The agencies provided us with some information today,” the WGA said. “The guild will consider it carefully and provide a response to the ATA when the parties meet later this week.”
In her opening remarks to guild leaders today, ATA executive director Karen Stuart said: “We have three short weeks before a dark cloud of uncertainly will hang over Hollywood, and we can’t allow that to happen. If we don’t start breaking this down and finding ways to bridge the divide, we will be putting our writers in an incredibly difficult position on April 6. That simply isn’t fair to your members and our clients, and no one wants that to happen.”
In their back-and-forth jabs and jibes, it was the ATA’s turn today to respond to the WGA’s counterproposals, which were delivered at their previous bargaining session on Thursday, when WGA West president David A. Goodman said that the two sides remain so far apart that “we are still speaking different languages on the crucial issue of the role of the union in protecting the wellbeing of writers.”
Stuart said that despite the “improved tone in the room” during last Thursday’s session, “we felt that we all took a big step backwards after that last meeting. We don’t want to let that happen so we’re trying again.”
Stuart said that the path forward might require breaking up the two sides’ negotiating teams into smaller “working groups” to tackle the most intractable issues. “So where do we go from here, and how do we break through this seemingly intractable position on packaging and affiliated production?” she asked. “We understand your desire to negotiate as a whole, but this is a very large group – you have more than 35 people at this table. It frankly doesn’t lend itself to a responsible dive and real discussion of the fine points. This current environment is unfortunately built for theatrics and one-way dialogues. Of course, we understand that the guild is representing its members in a collective fashion to reach a new agreement, but this is not collective bargaining and we are neither employers nor employees.”
This isn’t the first time she’s made that recommendation, however. “We’ve now offered several times to break into smaller groups to roll up our sleeves and work through the substantive issues of packaging, affiliated production and any other open issues,” Stuart said. “We understand that your membership would very much like to learn the facts. We’re willing to bring in additional experts from our member agencies to review our data, and explain operations more fully so you have a greater understanding of the market forces and the financial arrangements. We’re hopeful that doing so will provide clarity and comfort in the solutions that we have offered and will ultimately protect WGA members and our writer clients as you want to do.
“We have to keep stepping forward, even in small, incremental gains and compromises,” she said. “Doing so will build trust and show writers that both sides are trying their best to solve an incredibly hard challenge. We are committed to getting this done.”
Prior to the resumption of talks today, the WGA and the ATA issued dueling reports to support their positions. The WGA report says that private equity funding of the major agencies has inhibited them from “fulfilling the legal and ethical obligations of talent representation,” and “lays bare the growing disparity between soaring agency valuations, executive payouts, and declining writer pay during an era of industry growth and success.”
The ATA report claims writers would have had to pay at least $49 million more in commissions during the 2017-2018 TV season if their projects had not been packaged, because under the current system writers don’t pay agents their 10% commissions on packaged deals.
Stuart told guild leaders today that the ATA’s report proves that “if you eliminate packaging, the WGA will destabilize and hurt the broader entertainment ecosystem, including writers, actors, directors, managers and producers. Artists would have had to pay $110 million in commissions. Writers alone would have had to pay $49 million in commissions. Studios are paying fees now in lieu of agencies commissioning, but your proposal would put the burden of commissions back on the artists and take this money directly out of artists’ pockets, hurting their families and livelihood.”
To put that in context, she said that the WGA “was very proud to have achieved $130 million in wage increases from your last AMPTP negotiation. You should be proud of that accomplishment. However, if you remove packaging, the gain you fought for essentially will be wiped out for writers after just three years ($49 million x 3 years). It went in one pocket and went right out the other.”
She also told guild negotiators that “In addition to the data on television packaging, we’re also here today to answer your questions regarding film financing, sales and distribution. You presented us with a series of questions last week and we’ve worked through them and have answers for you.”
Despite the lack of progress on the two main sticking points, Stuart reminded the WGA today that there has been agreement on other issues. “As we’ve said from the beginning, we actually have quite a bit of common ground. Writers should be paid on time. Writers should not be asked to do free work. Writers should expect a safe and supportive work environment. Writers should have greater insights and transparency into agency operations and agreements. And, we collectively should be driving for increased diversity in our industry.
“We appreciated the tenor and tone of your remarks and our dialogue last week – there seemed to be a bit of a shift in tone that we expect was driven by our clients’ – your members’ – demand that both sides find a way to reach an agreement before the deadline. As you noted, this is a complex and challenging situation for both parties. We recognize there are two big issues standing between us and finding a resolution can be challenging when positions become entrenched.”
The WGA, for its part, has already withdrawn one of its other key proposals, dropping its demand that agents stop taking 10% on writers’ scale – the minimums negotiated by the guild.
Stuart noted that at their last meeting, “We worked in good faith to present writers with a balanced and reasonable solution” to the guild’s concerns about packaging and agency affiliations with production entities. “Packaging is a decades-old practice that has become an intrinsic part of our businesses,” she told the guild today. “Affiliated production, while a much more recently adopted practice, likewise has become an important alternative for writers and other artists in the new entertainment landscape driven by consolidation, streaming giants and globalization. Agencies participating in both are creating job opportunities where they otherwise would not exist, and produce significant financial benefits for writers. Our agencies are offering an alternative pathway as studios have shifted production practices and mega-conglomerates are growing with no conscience for the writer.”
The WGA, however, has called packaging “illegal blackmail,” and has accused the big agencies of being a “cartel” that’s cornered the market on Hollywood’s talent.
Stuart said” “We continue to listen to our clients when they explain to us their concerns, and why it is time to review and update the way we have been doing business in packaging, and when it comes to affiliate production. In response, we spent a significant amount of time developing new proposals for your consideration that sought to provide your members and our clients choice, more enforcement mechanisms, and greater disclosure and transparency.
“We genuinely believed our proposals – offering some greater controls and safeguards that would give your members and our writer clients more comfort and decision-making power in this new landscape – were the most serious attempt yet, from either side, to reach across the metaphorical wall to making a deal.”
But the guild’s response to those proposals, she said, was just to rehash its own proposals. “As you’ve seen us express publicly, we walked away from our last meeting feeling frustrated,” Stuart said. “Following suit from our proposals, we expected to see a point-by-point response with some movement from your side on the material issues in dispute. We expected to see your new counter proposals in response to the work and concepts that we had provided you as a well-developed starting point.
“Instead, we were presented with your original Code of Conduct simply reformatted with a new title. In essence, it contained all the same terms and didn’t respond to any of our new offers. And, it even included additional provisions that are onerous – and you had to know would be completely unacceptable – to agents.
“Your approach and proposed Code rob WGA members of choice and decision-making power. It’s a unilateral mandate that assumes writers can’t make good decisions for themselves. It wipes out financial confidentiality for writers. And, it gives the guild an unprecedented and inappropriate level of power and control over agency operations. Agents, by law, are fiduciaries of our individual clients. We cannot share their confidential information without their consent. And while we deeply respect this guild, any agreement that we ultimately reach has to account for that reality.”
The WGA East and West will hold a vote of their members later this month, when guild members are expected to approve its new Code of Conduct that would ban packaging and agency production deals with related entities.
According to the ATA, one of the questions being asked is this: “Clients have called us concerned that they are going to face a tribunal by the WGA Board, and that they are going to face discipline, potentially including expulsion from the guild, if they don’t fire their agents on command. Is that true?” The ATA got no response from the guild, but that’s clearly one of the guild’s options.
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